UPDATE: New Mexico Investment Lawsuit

New Mexico – A state judge has ruled against portions of a state law that allows taxpayers to bring lawsuits on behalf of the state to recover damages for fraud.

District Judge Stephen Pfeffer said it's unconstitutional for the law and its damage sanctions to retroactively apply to actions that took place before July 2007, when the law went into effect.

Pfeffer made the ruling on Wednesday in dismissing claims brought by a former state pension investment officer, who sued financial firms over failed New Mexico investments.

Frank Foy filed the lawsuit in 2008 against Vanderbilt Financial and its related companies over $90 million in failed investments.

Foy's lawyer, Victor Marshall, said Thursday the ruling was setback but didn't dispose of the case.

Copyright 2010 The Associated Press.